Quicken Loans Inc. may lease or buy a building in Detroit instead of constructing a new corporate headquarters, a top company official said Thursday, and the company will relocate fewer workers downtown than city officials originally hoped.

A decision has not been made but Dan Gilbert, founder and chairman of the nation's largest online mortgage company, hopes to make an announcement in the coming weeks, said Matt Cullen, president and chief operating officer of Rock Enterprises, an umbrella group for Gilbert's businesses.

Quicken's relocation from suburban Livonia is one of the most anticipated commercial real estate moves for downtown Detroit in the past few years. It's expected to provide a dramatic boost to the burgeoning residential and retail sectors in the city's core. The city and state put together more than $200 million in incentives over 20 years to lure Quicken, which was being wooed by several suburbs and states.

Quicken, including its Rock Financial Michigan unit, has outgrown its headquarters and the lease on its Livonia building is about to expire.

"Dan remains committed to Detroit," Cullen said. "We haven't put a date on the announcement but we still want to do it by the end of the year, and frankly, big decisions still need to be made."

That includes whether to build a headquarters on one of two city-owned sites reserved for Quicken -- the former J.L.Hudson's department store site on Woodward Avenue or the former Statler hotel site in Grand Circus Park -- or to lease or buy a building. Before the mortgage meltdown, Quicken was focused on constructing a new building.

The most rumored option is for Quicken to move into the former headquarters of Comerica Inc. known as One Detroit Center, at 500 Woodward. The 43-story building has 394,500 square feet of vacant office space, according to CoStar Property data. "That's a beautiful building," Cullen said. "There are a few buildings that could meet our criteria."

Several commercial real estate analysts say putting together the financing to build a headquarters during a global recession is too tough. It's too soon in the process to know how much a new Quicken headquarters could cost. The two most recent buildings built downtown have cost millions to construct. The Compuware headquarters, which opened in 2003, cost $350 million and the second new building, One Kennedy Square, cost $54 million when it was built in 2005.

Private owners of downtown buildings would likely offer huge incentives to attract Quicken, making it a far less expensive to relocate to an existing building, several developers said.

"I always found it hard to believe Quicken could build new," said Mark Talley, a vice president in the downtown office of Grubb & Ellis, a commercial real estate firm.

"Some of that is due to the overall economic situation. But some of that also is due to the business they are in. They are a mortgage company and everyone in that business has taken a hit, often a major hit."

Gilbert has said in the past that Quicken and Rock didn't make subprime loans, though it did make so-called "alt-A" loans to borrowers with less-than prime credit.

And early on in the mortgage crisis it shifted rapidly to "plain vanilla" type loans for sums less than $417,000 that were bought by Fannie Mae and Freddie Mac, according to Gilbert.

But Quicken, which normally resells its loans quickly after making them, began to have a backlog of unsold loans that reached $100 million last year.

Cullen said Quicken will not bring 4,000 workers downtown as city development officials originally hoped, but he declined to say how many would be relocated.

Still, Quicken's intent on moving downtown will be a great economic lift for the city, said George Jackson, president of the Detroit Economic Growth Corp., the quasi-public agency that promotes city development.

"Whenever they move here, it will be very good news and it will have immediate and long-term positive impact for downtown and the city," Jackson said.

Much as it is disappointing not to get a new building downtown, renting existing office space, if it is sufficient to meet their needs, makes more sense at this time. Office vacancy rates are high enough without new construction.

Mortgage mogul Dan Gilbert will bring his Quicken Loans corporate headquarters to downtown Detroit, sharing space in the Compuware building at Campus Martius.

Sources from the city of Detroit and Quicken confirm that the mortgage lending giant will move 1,700 employees from its Livonia headquarters to four floors of Compuware.

Quicken has asked for a downsized package of tax breaks from the Michigan Economic Growth Authority, and a vote is expected either this week or next.

When Quicken announced its intention to come downtown two years ago, Gilbert promised to erect a new building. He looked at the site of the old Statler Hotel in Grand Circus Park and the Woodward Avenue property next to Compuware, where the downtown Hudson's store once stood.

But the economic downturn forced him to reconsider those plans based on the company's lesser needs. For now, Quicken will lease space from Compuware instead of building its own headquarters.

"We're excited that they are honoring their commitment to come to the city of Detroit," Mayor Dave Bing said Sunday. "They aren't building, but they are still coming and will be contributing to the solution and not the problem.

"Had they abandoned their plans, it would have contributed to the city's problems."

Bing's right. It's disappointing that a new building isn't going up to help fill the gaps in downtown's skyline. But it makes economic sense for both the company and the city.

Compuware also has been scaling back operations because of the economy and has considerable vacant space in its 6-year-old, 18-story headquarters. One floor had been occupied this year by the University Prep Academy Math and Science Middle School, which is moving to permanent quarters on the Detroit Science Center campus next fall.

Civic leaders hoped that the Compuware building would serve as a downtown destination point, with shops and restaurants. But recently, the Borders bookstore on the ground floor closed.

When Quicken moves in, it should shore up the Compuware building and take a downtown high-rise off the ailing list.

The recession has been rough on downtown landlords. The occupancy rate for downtown office space has dropped to right around 65 percent. Adding space before demand increases for the existing space would be foolhardy.

Quicken originally had hoped to bring another suburban business downtown with its move, namely ePrize LLC, a successful online promotions and marketing company in Pleasant Ridge, which has several hundred workers. Company founder Josh Linkner said moving ePrize's mainly young and college-educated staff downtown could still happen.

"We're not going to be part of the initial move with Quicken, but it's still an option we're taking a look at down the line, Linkner said.

A Quicken source said it will take several months to remodel the Compuware floors and expected the move from Livonia would be made in early 2010.

The transfers will pretty much empty the Livonia building, the source said.

What an absurd assinine WASTE if Quicken were to build a new structure in a CBD with vacancy rates as high as Detroits. Quicken could easily move into any number of suitable class A office space downtown without the need to build new. And i'm shocked at how much extra space Compuware has in their downtown hq. Have they layed off that many people?

I was thinking the same thing about the a name on the building and how (or even if) they are going to do anything special to accomodate Quicken such as a seperate entrance and a name plate somewhere on the building. BTW, I don't believe that Compuware was ever alone in their building. They've definitely lost a lot of folks, though.

Lastly, didn't the article in the Free Press, today, say that they backed off from building anew because they couldn't get financing for a new tower in this economy? That'd only make sense to me, though, if they were also building speculative space as well as space for the headquarters, though.

Quicken looks at 2 spots for eventual new downtown building
Louis Aguilar / The Detroit News

The sites where Quicken Loans Inc. may eventually build its downtown Detroit headquarters have been narrowed to a pair of Woodward Avenue locations: The place where the old J.L. Hudson's department store once stood or what's commonly referred to as the Monroe block, a Quicken official said Monday morning.

That's somewhat different from the sites Quicken was offered two years ago to build a new headquarters. The Hudson's site was an option, but the 1.9-acre city-owned parcel on the corner of Woodward and Monroe is new. Gone is the option of building on the former Statler Hotel site on Washington Boulevard across from Grand Circus Park, said Quicken spokeswoman Jennifer Kulczycki.

Details of the city and state tax incentives are still being finalized for the online mortgage company's initial move to the Compuware Corp. headquarters in Campus Martius downtown. That deal will likely be a five-year lease for four floors in Compuware that will bring about 1,700 workers from Livonia to downtown. Tuesday, the board of the Michigan Economic Growth Authority is expected to approve a package of incentives for the Quicken move.

Quicken still intends to build a new building, though no timeline has been given. Based on the two potential sites, the new Quicken building would be located within a block of the Compuware building.

The Monroe Block was last proposed as potential site for a $150 million project called the Cadillac Centre, an office, retail and upscale condo project. That project, which was unveiled last year, died quickly.

The sites where Quicken Loans Inc. may eventually build its downtown Detroit headquarters have been narrowed to a pair of Woodward Avenue locations: The spot where the old J.L. Hudson's department store once stood or what's commonly referred to as the Monroe block, a Quicken official said Monday.

That's somewhat different from the sites the city offered the online mortgage company two years ago to build a new headquarters. The Hudson's site was an option, but the 1.9-acre, city-owned parcel on the corner of Woodward and Monroe is new. Gone is the option of building on the former Statler Hotel site on Washington Boulevard across from Grand Circus Park, said Quicken spokeswoman Jennifer Kulczycki.

The original deal expired in light of the national mortgage meltdown. Quicken, based in Livonia, says it has weathered the crisis and in May posted a record $3.1 billion in mortgage-lending, fueled by a steady rise in consumer loan applications and refinancing sparked by falling interest rates. But Quicken maintains that getting private financing to build a new headquarters is still too tough and it has chosen instead to move temporarily into the Compuware Corp. headquarters in Campus Martius.

Details of the new city and state tax incentives are still being finalized. That deal will likely be a five-year lease for four floors in the Compuware building that will bring about 1,700 workers from Livonia to downtown. Today, the board of the Michigan Economic Growth Authority is expected to approve a package of incentives for the Quicken move.

Based on either of the two potential sites, the new Quicken headquarters would be located within a block of the Compuware building.

The Monroe block was last proposed as potential site for a $150 million project called the Cadillac Centre, an office, retail and upscale condo project. That project, which was unveiled last year, died quickly.

And the Free Press is reporting that construction could begin in mid-2013.

I would hope they pick the Hudson's block so we can finally have a "street wall" along that stretch of Woodward. The only way I would prefer the Monroe Block is if Gilbert decides to build a tall, slender tower (30+ stories).

Yeah, I'd hate to see it on the Monroe Block for the simple fact of how squat the building would most likely be. If the city was interested in density, they'd formally divide the Monroe Block into different parcels instead of trying to push it off on someone as a single parcel.

It's always surprised me it's taken so long for the Hudson-Woodward Block to be developed. There are probably few other sites in the entire country so ready for large-scale construction. lol